Michael Pyle
Chief Executive Officer at Intercontinental Exchange
Thank you, operator. Good morning, everyone, and thank you for joining us on today's call. The third quarter was EIC's best in our 18-year history, and there will certainly be lots to talk about. In line with other calls this year, we will attempt to keep our prepared statements as brief as possible to allow time for questions. With me today are Richard Wowryk, our CFO; and Carmele Peter, our President. During 2021 and the first half of 2022, we completed a number of acquisitions and growth capital investments to drive future growth. At the same time, we strengthened our balance sheet to ensure we had the access to capital to fund opportunities when they were identified. We guided the market that the return on these investments would be evident in future periods. While the second quarter of this year was strong, it did not include a full quarter's results from Advanced Paramedic Limited and Northern Matton Bridge. Q3 marks the first quarter in which all of our investments were generating returns.
Except for the new Netherlands operations in PAL, which goes into service in the fourth quarter, but more on that later in our comments. The third quarter clearly shows the accretive nature of those investments and the value of our consistent, reliable business model. The third quarter is our strongest seasonally as our Northern Airlines and our Northern Mad operations experienced the highest customer demand. We would expect it to typically be the strongest financial results of the year, and 2022 is no exception. The results, however, are much more significant than simply being seasonally strong. They mark new highs in every metric, whether on an absolute or per share basis. While Rich will go through the financials in more detail, I would like to highlight the magnitude of the increase in these metrics. Revenue increased by 47% to $587 million, up from $400 million last year. This was 11% higher than the previous quarterly high.
Adjusted EBITDA grew 58% to $150 million from $95 million last year. The $150 million exceeded the previously quarterly high record of $115 million by 31%. Free cash flow less maintenance capital expenditures increased 43% to $69 million from $48 million last year. This was 43% higher than the previous high of $48 million. On a per share basis, it rose 34% to $1.70 from $1.27 last year. This was 30% higher than our previous best. Net earnings grew by 123% to $49 million from $22 million last year. This was 63% higher than the previous best. EPS increased 107% to $1.20 from $0. 58 and exceeded the previous high by 33%. Adjusted net earnings reached $55 million up 97% from last year. The results exceeded the previous high by 42%. Adjusted EPS was $1.34, up 84% from last year. This exceeded the previous high of $1.03 by 30%. Free cash flow less maintenance capital expenditure trailing 12 payout ratio improved to 52% from 57%. The trailing 12 payout ratio on an adjusted net earnings basis improved significantly to 72% from 109%. The strengthening of the payout ratios is even more impressive given the two dividend increases announced with Q1 and Q2 results this year.
Improved performance in both our Aerospace and Aviation segment and our Manufacturing segment drove our aggregate results, while head office costs increased marginally from the comparative period. Our legacy airlines operations continued to improve during the third quarter, albeit at a slower rate than earlier in the year. Passenger demand increased throughout the quarter, but there were geographic variations. Our maritime operations exceeded -- now exceed 2019 levels, while Central Canada and Netevia between 75% and 95% of pre-pandemic volumes. The slower recovery in Central Canada -- continues to be driven by access to medical and diagnostic appointments. The capacity of the medical system is still recovering from the pandemic and is expected to improve over time. There is a large backlog of patients needing to be seen, and this is expected to drive strong demand for the foreseeable future. Our freight volumes have remained stronger than prepaid beta levels in spite of the bounce back in passenger travel.
As it has throughout the pandemic, our Medevac operations produced steady returns. Demand is not linked to the economy and varies only slightly from period to period. Our maritime surveillance business performed as expected during the third quarter, while hitting an exciting nonfinancial milestone. We delivered the first aircraft for our Netherlands contract and the aircraft went into service this quarter. A second aircraft will go into service later in the fourth quarter, and this opens our first surveillance operation in Europe. Regional One continued to generate strong revenues in the sale of full aircraft, engines, components and parts. Its leasing portfolio is recovering more slowly than we had originally anticipated. This delay is a result of the pilot shortages across the industry. While passenger demand has bounced back, there are not enough pilots available for the airlines to operate all the flight segments that they would like to. As a result, they have chosen to fly the larger aircraft first because they have greater capacity and generate more revenue. The narrow-body regional jet market will recover as more pilots are available.
There is not a new aircraft alternative for these routes, and we expect the lease portfolio to improve over the next few quarters. The pilot shortage is creating challenges industry-wide. Our investment in Moncton Flight College several years ago is assisting us with this challenge in our operating airlines. Our life and flight program is now delivering our first fully certified pilots with sufficient experience to pilot for our airlines and the program is growing in size. We also completed the inaugural year of the Tick Mason indigenous pilot pathway training, indigenous pilots for our career in Aviation. While it will take a couple of years for the pilots to be fully certified and have the necessary flying experience to work at our airlines, the first year was a great success, and we look forward to expanding the program in the future. We are ecstatic to announce that 10 of this year's 11 candidates have completed their flight test, the first step in a career in Aviation.
This graduation rate exceeds most universities and colleges and was above our most optimistic expectations. Working with our pilots, we have been able to make sure we have sufficient capacity to meet our customers requirements, although there is no doubt that the lot of supply has increased our cost. A quick comment on fuel prices before we move on to the Manufacturing segment. Fuel prices moved rapidly higher earlier in the year before moderating in the summer. Many of our contracts have fuel surcharge provisions and our market position ensures we are able to pass on increased fuel costs to our customers, whereas specific contractual arrangement does not exist. The price and adjustments typically lag the change in fuel costs. So there is a marginal hit during times of rapid escalation, but a reversal effect in times of fuel price decline. As such, in the long run, the price of fuel does not really impact adjusted EBITDA in absolute terms. But it can have short-term impacts as our pricing takes time to adjust.
Conversely, in times of rapid reduction in fuel costs that can result in temporary increases to adjusted EBITDA until price reductions are implemented. Our Manufacturing segment was the main driver of the strong performance in the third quarter. Revenue increased 78%, $223 million, while adjusted EBITDA by 281% to $60 million. This growth was almost entirely driven by the three acquisitions made in 2021 and another completed in the second quarter of this year. Looking forward strategy in previous periods was rewarded in this quarter. Our West tower subsidiary continues to be one of the Canada's leaders in the supply, construction and maintenance of cell towers in Canada with the rollout of 5G systems accelerating across the country, WesTower chose to become a one-stop supplier for the telephone companies, providing both towers and below ground cable. In order to accomplish this, we completed the acquisitions of Telecom and Rico in 2021 to augment our underground capabilities.
The underground capabilities were integrated into West Tower and generated significant year-over-year growth. That machine is growing consistently and profitably since its acquisition in 2015. The company has invested in additional production capacity to meet customer requirements. But even with the investments, the factory was nearing capacity. The decision was made to acquire MacCap, a successful competitor bent machine. This enabled that machine to diversify its customer base while immediately and very accretively increased its production capacity. The benefits of this decision are reflected in the third quarter results. The most significant driver of the improvement in manufacturing segment was the acquisition of Northern Mat & Bridge earlier this year. It was EIC's largest acquisition to date and as such would be expected to have a material impact on our segment and our consolidated results. Northern Mat's actual results have exceeded those expectations.
For those of you who are not with us on the first and second quarter calls, Northern Mat temporary access solutions to substantially mitigate, if not eliminate the environmental impact of project instruction. They provide wood matting and bridge solutions, which enable projects to be built without building temporary access roads that are expensive and very difficult to remediate. They service a wide variety of projects to electrical distribution lines to pipelines, the oil and gas production to forestry and mining. Northern Mat experienced strong demand in the third quarter with long linear projects and pipelines requiring a large number of mats for prolonged periods. Higher oil and gas prices have resulted in increased drilling, which in turn has increased demand from Mat. Uncertainty created by the pandemic resulted in many other industry players reducing their investment in new matting, and as such, overall supply was low at a time when demand was high.
This problem was exacerbated by very high timber prices for matting fiber, which pushed up the price of new mounts. Northern Mat's vertically integrated model and inventory of raw fiber enabled the company to ramp production quickly in response to market conditions and thereby, satisfy market demand. I should point out the Northern Mat's business has a seasonality, which is very similar to EIC as a whole. It is slowest in the first quarter when winter conditions freeze the ground, reducing the need for mating, and while construction is also seasonally slow. Demand ramps through the second quarter before peaking in the third quarter. The fourth quarter starts strong before slowing in concert with the colder weather towards the end of the year. The strong demand and challenged supply during the third quarter further enhanced our results. I believe most of the forward-looking discussion to Carmele later in this call. But I would like to briefly discuss the outlook for Northern Mat going forward.
We have discussed on previous calls how we believe the long-term demand for temporary matting solution is strong and will grow as it has become an environmental best practice for mitigating the effect of construction projects in a wide variety of industries. While this demand will certainly vary from period-to-period depending on which projects are being built, the long-term trajectory is very promising. The outlook for the short and medium term remains very positive as there are a number of long linear projects, which are expected to continue through 2023 and beyond. It is much harder to forecast supply, which may increase next year, but this is far from certain. As such, while we are confident that 2023 will be a strong year for Northern Mat, precise forecasts are challenging. Quest continued to see strong demand for its products in the third quarter. Even with the higher interest rate environment to continue to grow its order book in the third quarter, which continues the momentum experienced in both the first and second quarters, where the order book grew in each of those quarters as well.
While we have seen a change in our product mix, towards rental properties and away from condominium projects. The aggregate demand, particularly in our American markets remain strong, while the company continued to deal with in a regular production schedule is the right of projects delayed or canceled during the pandemic, operating results were in line with our internal expectations. Interest rate environment has continued to rise during 2022. And while this has increased the carrying cost of our floating rate debt, it is a significant positive impact on M&A. We often compete for target companies with financial acquirers who will find a higher appetite for leverage than we do at EIC. The higher cost of debt reduces what those companies can afford to pay for an acquisition and mezzanine debt, in addition to be much more expensive, is also hard to access. This has resulted in EIC being more competitive on larger acquisitions than we have been in the last few years when the capital markets were hyper liquid.
The enhanced opportunities for EIC in the M&A market, combined with our long seeded strategy of maintaining strong, liquid balance sheet, thus to augment our balance sheet within offering common shares during the quarter. We completed an issue of 100 million of common shares, which was very well received by the public markets, and demand was so strong that the underwriters exercised their full overallotment option, bringing the total offer to 115 million. Finally, before I hand the call over to Rich, I want to touch briefly on the strength of EIC's diversified operations and dealing with a potential recession in 2023. Many economists are predicting a slowdown in the economy or an outlined recession next year. EIC has seen absolutely no sign of any slowdown in our business to date and our diversification and contractual revenues provide us great protection should a slowdown occur.
I will now hand off the call to Rich who will detail our second quarter results.